The Federal Government borrowed and spent $5.1 trillion to get $700 billion in total GDP "growth" from 2008-2011. In constant dollars, there was no growth at all.

The Federal government borrowed and spent $5.1 trillion over the past four years to generate a cumulative $700 billion increase in the nation's GDP. That means we've borrowed and spent $7.28 for every $1 of nominal "growth" in GDP.

In constant dollars, GDP is flat: we got no growth at all for our $5.1 trillion: zip, zero, nada. In constant dollars, the GDP in 2011 might return to the 2007 level, if the economy continues "growing" at the same pace reached in the first three months of 2011. If not, then the GDP will actually be lower than pre-recession levels.

If you borrowed $7 to get $1 in your pocket, would that strike you as a good deal? How long do you reckon you could borrow $7 to get $1 of "growth" in your finances?

Let's say you need $3,000 a month to pay all the household bills. No problem, just go borrow $21,000 and your household economy will "grow" by $3,000. If this isn't the height of fiscal nonsense, then what is?

Total public debt in 2007 (pre-recession) was $8.95 trillion.Total public debt in 2010 was $13.53 trillion. This is an increase of $4.58 trillion. Add in the 2011 deficit of $1.6 trillion and the total is $5.1 trillion in additional debt in the four years from 2008 to 2011.

Let's be generous and assume the U.S. economy continues "growing" at the first-quarter pace of 1.8% for all of 2011: GDP advanced 1.8% in Q1 2011 (BEA). That would add $260 billion to the 2010 GDP, so the GDP at the end of fiscal year 2011 would total $14.77 trillion in nominal dollars. In constant dollars, it might reach back up to 2007 levels, but only if the economy doesn't roll over.

Total up the gains and declines in annual GDP for the four years from 2008 through 2011, and you get $690 billion. That's the total sum of each year's gains for the four years. That means we as a nation borrowed and spent $5.1 trillion to get $700 billion in GDP "growth." That means we borrowed and spent $7.28 for each $1 of nominal GDP "growth."

These don't include "supplemental appropriations" for war costs, losses in Fannie Mae and Freddie Mac, etc., which is why the debt has risen by more than the sum of the "official" deficits.

Notice the trend here? The deficits keep getting larger as the "recovery" continues. If we keep "recovering" at this pace, we'll soon be borrowing 50% of the Federal budget each and every year.

And of course this doesn't include the $2 trillion increase in the Federal Reserve's balance sheet--trillions squandered on propping up the housing markets--(look how successful the Fed was in propping up housing valuations), nor does it include TARP and other "off-balance sheet" Treasury bailouts and guarantees.

Does borrowing and blowing $7 to get $1 of nominal "growth" seem like a good deal to you? Does it strike you as sustainable? If it does seem sustainable and a good deal, congratulations, you are qualified to run for Congress.

Unless your body is able to burn fat efficiently the extra weight you have to carry around while "gathering" will actually speed up your demise. The thing is most people can't burn fat efficiently; it is good to keep at least a routine of one long walk once a week.

That gorilla faced bitch is one disgusting waste of oxygen. But that Barack...he's so eloquent, a great speechist. I mean, it totally changed what I thought about black people. I'm so glad I voted for him. And no, it wasn't to prove I'm not racist: I have lots of black friends! I don't care how much money he has to spend to pull this ditch out of the car! We need our unions and you mega wealthy yacht owners need to pay your fair share. Spread that wealth around like jam on lamb.

I never had any hope there would be real change until I saw what that poor Kenyan/Indonesian/Muslim/Christian-American had done with himself. It was the first time in my life I was proud to be an American. My only regret is that I can't send my kids to a school where they sing songs of praise to our dear leader all day long. I sure hope little Jenny finds a stud of a fella like Barry O. He's really a game changer on the race-mixing front going forward.

By the looks of it, it appears that when Michelle proclaimed that in order to get the things she wants “someone is going to have to give up a piece of their pie (that’s you) so that someone else can have more,” she took most of the pie.

Reminds me of Charlie Rangel’s philosophy in that old joke when he got a call from his banker telling him his account was overdrawn. Yelled Charlie: “Whaddya mean, I’m overdrawn?I still have my checkbook!”

And the awareness that the Federal Reserve "system" is a cartel and primarily exists for the benefit of government "solvency" and the already wealthy.

I'm glad someone else finally put this type of article out there. GDP "growth" is a really silly measure of how good life is getting for people when it is measured in currency units that are worth less in real terms on a daily basis.

How about real wealth growth per capita? Or purchasing power growth per capita?

When facing unacceptable reality, all you have left is pretend, isn't it?

We can go down a list of "truths" people in this country cling to, just think about what's politically correct versus what is real. Things which people emotionally react to, etc. Just go down and list them; it's huge.

We could pretend, but there's a super election cycle coming up in 2012.

Of course the real GDP of the United States is shrinking, given that a larger share of it is comprised of services which derive their value, in large part, from wages paid, and these wages will be under continuing pressure in both real and even nominal terms.

And then there's the big fact that more of the U.S. GDP is a function of deficit spending by government (adding to our heaping national debt year after year) than at any time since the core years of WWII, which when viewed in proper context, is a wasteful and counterproductive exercise that only subtracts from future GDP, as it will only create higher costs and a higher drag on growth in the private, real, organic economy.

One private business owner's miserable experience in a banana republic is some governmental employee's, or especially, government contractor's banana split sundae.

It's astonishing how much bullshit backs up the GDP data - hedonics, substitutions, price deflators. My gut tells me that the productive economy has been in contraction since at least 1999, hidden by public and private debt growth and dodgy adjustments..

The importance of the price deflater used by the BEA cannot be overstated. In calculating the "real" GDP the BEA continued to use an overall 1.9% annualized inflation rate, which is substantially lower than the inflation rates being reported by any of the BEA's sister agencies. The mathematical implications of the deflater are simple: a lower deflater creates a higher ‘real’ GDP reading. If April's CPI-U (as reported by the Bureau of Labor Statistics) of 3.2% year-over-year inflation is used as the deflater, the reported 1.84% annualized growth rate shrinks to a 0.56% annualized rate, and the ‘real final sales of domestic products’ is actually contracting at a 0.63% rate. If instead of the year-over-year CPI-U we were to use the annualized CPI-U from just the first quarter (5.7%), the ‘real’ GDP would be shrinking at a 1.82% annualized rate, and the ‘real final sales of domestic products’ would be contracting at a recession-like 3.01%.

I wonder if this is part of the reason for the dramatic and sudden deterioration in the data releases. Has the Treasury has been trying to push the Fed to keep monetizing their borrowings, but Bennie's been resisting? Once you get addicted to something like printing money, politicians find it very hard to break the habit, which is one of the most powerful arguments for an independent central bank..

So, you're a mind reader now? I doubt very much that you actually know what goes on inside Ben's bankster-programed head. Wait, you're not sleeping with him, are you?

Ok, you could easily be right (hell, the odds are 50/50 aren't they). However, when the withdrawls from removal of easy money start we will find out for certain. I'd wager that we see some kind of fed action to prop up things no latter than Labor Day - regardless of Ben's current intentions or desires.

Some feel confident that the trend and the economic math and political calculations make it more certain than not.

The real questions that should be asked by more people, and given a deeper analysis, is whether it will matter, and if so, in what ways? What about the law of diminishing and even negative returns? What about the size, scope and type of collateral damage resulting from such distortion and suppression of free market forces?

Even asking questions like that requires a state of mind that I doubt exists in the circles that will make the decisions. But, for those of us on the outside, how we answer will suggest some obvious courses of action.

What's amazing is how many "smart" money managers extrapolate that this company's earnings are at 10x and they are working on righting the ship and it won't take much to move the stock blah blah blah etc. etc. etc. while never stoping to ask themselves how real is anything in the economy? I mean this is a market that has only one useful metric that matters: do we keeping printing or not?

Literally, everything else is total noise and non-sense. But tell that to a blind-sided, brainwashed, value investing crowd that will dimiss you faster than they can flush the toilet. Weird.

I thought burger construction and sandwich artist actions were re-classified as maufacturing or some such nonesense -- if so, there's your GDP growth. Seriously what else can it be then, other then a bold faced lie ?

But, you see, that's how our GDP has been "growing" for decades, with borrowed money. However, a reduction in private borrowing due to the debt wall hit in 2007 has simply been replaced with sovereign borrowing. And that doesn't actually fix the debt problem because we are simply bailing the boat rather than plugging the leaks. Eventually, their arms will get tired and we'll plow into the bottom like the Titanic.

There is a big difference between borrowing $7 to increase cashflow by $1 and borrowing $7 to create $1 in equity. At this time, with the system already overleveraged, the first option begins to look less appealing, although that won't stop me from renting out my overvalued and overleveraged underwater townhouse.

The UK is and has experienced the same lack of GDP growth from an ever growing private and government debt bubble. The US and UK are joined at the hip, we borrwed in the private sector and public sector and lived it up for a decade. The debts fostered little growth except in the FIRE economy and public services. Now the private debt bubble has burst, we await the government sector debt bubble blowing. When debt is factored out, neither economy has any growth potential at all. Except perhaps in crime and poverty.

Thanks to CHS for another swell reminder that the US - and, by inference, the global - economy is in the tank. The noise gets so loud sometimes that one must turn it off and just go about one's daily activities.

It is clear that our economy has sunken into an expanding debt hole with no way out, so the best option is to simply prepare for Armageddon, because, with the surety of the swallows returning to Capistrano, this economy will crumble.

Shed debt and physical goods of little value. Invest in precious metals, food, land, seed, machinery and tools. Only way out come 2015, if not sooner, maybe much sooner.

Thats what Im doing, talking to local farmers for a deal to sell off some of their farmable land, raise crops, some animals, whatever it takes to get thru the other side of this obvious collapse because paper wont be worth anything but something to start a fire.

Plus, underneath the numbers, the actual GDP, is comprised of trillions of nonproductive financialization activity. CDS on the phases of the moon, other irrelevancies, all get counted as "product." It's a rotting carcass of an economy, with the meat being stripped from the bones by a kleptocratic elite.

Whenever I see basic and straightforward analysis that exposes the system as a lie, for one second I think "it can't be correct...if it's so simple to see the lie, the citizens would revolt"...but then I remember the conversations with relative at a recent barbaque or party and I recall that they all knew incredible detail about the American Idol singers and every contestant on Dancing With the Stars but had no idea who their state senators were, who their congressperson was, what the Treasury is, how the Federal govt finances its spending, etc, etc. Then I realize how easy it is to pull off this massive ponzi IN PLAIN SIGHT OF THE PUBLIC. Just not enough peole know about it...let me rephrase that....not enough people care about it.

the bit you are overlooking is that the proceeds of 'the massive ponzi' are being spent on those people you are referring to ie the public. they want it; they demand it. it is not being done to them, it is being done for them, at their insistence as voters. you might like to consider what would happen to any president who, say, actually tried to stop spending trillions on ideological wars.

it may suit some people's paranoid fantasies to believe that the entire world of business and government is some monolithic conspiritous whole, but the actuality is that all the fiscal problems of the West are the result of politicians doing what voters demand. in case anyone hasnt noticed it is a problem almost everywhere.

In addition to a profligate and math challenged Congress, Americans are up against a Fed that is destroying the purchasing power of the few dollars Americans have left after paying for a Nanny State of welfare and warfare and bank bailout.

Says Ron Paul: “People are beginning to realize that when the Fed in effect doubles the worldwide supply of US dollars in a relatively short time, it has the effect of stealing half your money through reduced purchasing power.”

The Fed also is undermining America’s foreign policy by lending in secret huge sums of our money to foreign banks, according to Paul: “In one week at the height of the crisis, about 70% of the money doled out went to foreign banks.

“We were told that bailing out banks was going to stave off a massive depression. Depression for whom?” asks Paul.

Don't worry, Bernanke has testified before Congress and told incredibly piercing 60 Minutes interviewers that he is fully prepared, and in fact, anxious to "withdraw liquidity as needed and when the time is right."

Reminds me of the recent Matt Taibbi story in Rolling Stone of the two well-connected Wall Street wives who got together and formed a real estate investment company on a $220 million so-called free-money “loan” from the Fed. You know, job stimulus money.

Then, one of the wives bought a $13.5 million home with her husband, the CEO of Morgan Stanley. You know, trickle-down stimulus money.

so, it has to be asked. what would have happened without the $5 trillion in borrow/spend? Okay, the biggest part of our reaction to the Bush recession was to loan banks money at 0.01% so they could loan it back as excess reserves at 0.4%. But without the stimulus spend where would GDP be? Everybody's community rebuilt roads and other such stuff to put the construction workers back on the job. Would we have been at a $9 T economy? There's no way to know, but it was assumed this prevented an epic collapse.

honestly, this whole thread is just such utter bullshit. GDP is growing, and the entire planet of anyone who cares, already knows that GDP includes government spending. so the only point here is that GDP ex governement spending is not growing. if that is so, then it is not some startling revelation, it is just a different line on the same data release.

if it is such a bother for some people to have a positive growth number in this economy, then invent your own with some other definition, and use that. in the meantime, GDP is a measure with a well understood meaning, and it has positive growth.

"Total public debt in 2007 (pre-recession) was $8.95 trillion.Total public debt in 2010 was $13.53 trillion. This is an increase of $4.58 trillion. Add in the 2011 deficit of $1.6 trillion and the total is $5.1 trillion in additional debt in the four years from 2008 to 2011."

Based on the CBO’s data, I calculate a fiscal gap of $202 trillion, which is more than 15 times the official debt. This gargantuan discrepancy between our “official” debt and our actual net indebtedness isn’t surprising. It reflects what economists call the labeling problem. Congress has been very careful over the years to label most of its liabilities “unofficial” to keep them off the books and far in the future.

For example, our Social Security FICA contributions are called taxes and our future Social Security benefits are called transfer payments. The government could equally well have labeled our contributions “loans” and called our future benefits “repayment of these loans less an old age tax,” with the old age tax making up for any difference between the benefits promised and principal plus interest on the contributions.

The fiscal gap isn’t affected by fiscal labeling. It’s the only theoretically correct measure of our long-run fiscal condition because it considers all spending, no matter how labeled, and incorporates long-term and short-term policy.

only thing holding this country together is free Internet PORN!! If the feds take that away, people would have an introspective epiphany that would shake the every foundation of government.. Reason Porn makes you feel inferior to the images you see and allows you to stop thinking.

Yes, not to mention that a goodly portion of the $14.5 trillion nominal GDP is just the result of preceding massive credit bubble misallocation, and Govt debt growth, to prevent total dis-embowelment of said "GDP"

Anyone who thinks this is growth is not reading their music as they play along in the symphony of bankster chaos.